Wednesday, August 26. 2009

Readers of this blog are invited to go back to an article we did earlier this year on YouTube economics, which showed that it swings hugely on the % of its videos (very small today) that can be advertised against. The problem with UGC video is that its seen as very risky, for a variety of reasons (taste, quality, legality). Today, YouTube carries on in its attempts to make money by increasing the % withcuration of the "hit head" of its UGC video collection. :

We decided it was time to spread the wealth. Today we're excited to announce that we're extending the YouTube Partnership Program to include individual popular videos on our site. Now, when you upload a video to YouTube that accumulates lots of views, we may invite you to monetize that video and start earning revenue from it. To determine whether a particular video is eligible for monetization, we look at factors like the number of views, the video's virality and compliance with the YouTube Terms of Service. If your video is eligible for monetization, you will receive an email and see an "Enable Revenue Sharing" message next to your video on the watch page, as well as in other places in your account:

Once you've chosen to enable revenue sharing, YouTube will sell advertising against your video and pay you a revenue share into your Google AdSense account each month.

This is thus an attempt to get the UGC videos that actually could make money to actually make money, by wrapping them in a program that is safe to advertise against, and has proven its quality by the quantity of hits. Videos are more expensive to serve than searches, owing to their bigger file size, so the transaction return per Ad has to be higher - hence the curation only of the "hit head" UGC videos.

By the way, if a proof of the general economic uselessness of the Long Tail in current new media was needed*, this is it. Follow the money, as they say...... in venality veritas.

(*apart from being a large number to bamboozle dumb companies to part with plenty of money to buy your New Media entity, that is )

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